Correlation Between Bank of America and BERKSHIRE
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By analyzing existing cross correlation between Bank of America and BERKSHIRE HATHAWAY ENERGY, you can compare the effects of market volatilities on Bank of America and BERKSHIRE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank of America with a short position of BERKSHIRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and BERKSHIRE.
Diversification Opportunities for Bank of America and BERKSHIRE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and BERKSHIRE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and BERKSHIRE HATHAWAY ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BERKSHIRE HATHAWAY ENERGY and Bank of America is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank of America are associated (or correlated) with BERKSHIRE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BERKSHIRE HATHAWAY ENERGY has no effect on the direction of Bank of America i.e., Bank of America and BERKSHIRE go up and down completely randomly.
Pair Corralation between Bank of America and BERKSHIRE
Considering the 90-day investment horizon Bank of America is expected to generate 1.29 times more return on investment than BERKSHIRE. However, Bank of America is 1.29 times more volatile than BERKSHIRE HATHAWAY ENERGY. It trades about 0.1 of its potential returns per unit of risk. BERKSHIRE HATHAWAY ENERGY is currently generating about -0.04 per unit of risk. If you would invest 3,938 in Bank of America on September 1, 2024 and sell it today you would earn a total of 813.00 from holding Bank of America or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank of America vs. BERKSHIRE HATHAWAY ENERGY
Performance |
| Timeline |
| Bank of America |
| BERKSHIRE HATHAWAY ENERGY |
Bank of America and BERKSHIRE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and BERKSHIRE
The main advantage of trading using opposite Bank of America and BERKSHIRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, BERKSHIRE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BERKSHIRE will offset losses from the drop in BERKSHIRE's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| BERKSHIRE vs. MGIC Investment Corp | BERKSHIRE vs. Nexstar Broadcasting Group | BERKSHIRE vs. Black Hills | BERKSHIRE vs. Western Asset Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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